UK Housing Market Shows Signs of Slowing
The UK property market is showing more signs of slowing down with a key survey showing that price gains are getting harder to achieve after the latest series of interest rate rises.The Royal Institution of Chartered Surveyors said only a net balance of 10.6 pct of surveyors reported price gains in June, well down on the 22.5 pct seen in May and the long run average of 21.6 pct. The latest figure is the lowest since Jan 2006.
Analysts polled by Thomson Financial News had predicted a more moderate slowing down, to 20 pct.
New buyer enquires declined at the fastest pace since Feb 2006 as the interest rate cycle began to weigh heavily on first time buyer affordability. Enquiries fell across all regions, except for Wales, the West Midlands and Scotland.
New instructions to sell property fell sharply after many sellers brought forward their instructions to May, in order to avoid the up-front cost of Home Information Packs.
At the same time the ratio of completed sales compared with the stock of available property on the market fell for the third consecutive month indicating that market conditions continue to loosen, RICS said.
Confidence levels were also dented. Surveyor confidence in the sales outlook almost halved, falling to the lowest level since June 2004.
RICS spokesman, Ian Perry, said: 'House prices have finally started to cool significantly for the first time since the recent mini boom in the housing market got underway in 2006.'
'Interest rate hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a home,' he added.
'A softer landing for the housing market is in store as we move into the autumn.'
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